07:59 Until recently full of promise, satellite radio runs into static - WSJ
WSJ reports in addition to not activating pre-installed car radios, or those given as gifts, customers who actually sign up don't always stick with the service. Many people are simply having iPod adapters installed in their cars and skipping satellite altogether. In addition, bidding wars have driven up the cost of on-air talent far beyond what was initially expected. When iconic morning host Howard Stern moved from regular radio to satellite earlier this year, it was supposed to be a coming of age. Instead, the industry's two rivals, XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI), are still reporting heavy losses, despite a few years ago telling investors they would need four mln customers each to break even. XM crossed that mark more than a year ago; Sirius hit it earlier this year. Last year, XM lost $667 mln, and Sirius lost $863 mln. And Sirius is facing a potential exodus of subscribers as a clutch of promotional one-year trials soon comes to an end. The cos are taking markedly different approaches to overcoming their problems. XM is cutting back on advertising, restructuring its debt, and reining in its rebate program. Sirius, while actively cutting costs, is working hard to stoke subscriber growth. |
